IS CASPIAN SEA CLOSE TO ACQUIRE A STATUS?

On April 22, Moscow hosted a conference of foreign ministers of the five littoral states of the Caspian Sea. The conference was attended by Elmar Mammadyarov of Azerbaijan, Sergey Lavrov of Russian Federation, Erlan Idrisov of Kazakhstan, Rashid Meredov of Turkmenistan, and Mohammad Javad Zarif of Iran. The purpose of the event was to do background work for the IV Caspian Summit to take place in Astrakhan.

The III Summit, which took place in November 2010 in Baku, adopted an important agreement on security cooperation in the Caspian Sea. The Summit also gave a number of instructions to the Commission of Special Representatives, comprising of deputy foreign ministers of the littoral states, to arrive to an agreed legal status of the Caspian Sea. Their intensive dialogue has resulted in drafting Agreement in the area of hydrometeorology, and Agreement on Cooperation Mitigation and Addressing Emergencies in the Caspian Sea, which are ready for signing. Drafting of Agreement on preservation and rational use of biological resources of the Caspian Sea is nearing completion. 

Speaking at the press conference in the aftermath of the meeting, Russian foreign minister Sergey Lavrov positively assessed the results of discussions, "We reviewed the progress in development of the Convention on legal status of the Caspian Sea, and stated significant progress, including one we achieved in today's negotiations". According to the Russian minister, although the Convention on legal status of the Caspian Sea will not be ready for the Astrakhan Summit scheduled for this fall, it was possible to agree on a significant number of underlying principles of the future treaty.     A whole set of documents to be discussed by leaders of the littoral states during the forthcoming summit are also at advanced stage of preparation. In particular, Mr Lavrov emphasized that it was possible to make progress in delineation of water space of the Caspian Sea. 

Minister of foreign affairs of Azerbaijan agreed with his Russian colleague, and also noted progress in agreeing the fundamental principles of the legal status of the Caspian Sea, which, according to him, would solidify the existing framework for cooperation between the littoral states. Mr. Mammadyarov stressed significance and success of the projects supported by Baku, such as, Baku - Supsa and Baku - Tbilisi - Ceyhan oil pipelines, Baku - Tbilisi - Erzurum gas pipeline, Baku - Tbilisi - Kars rail road which link Caspian Sea with Black Sea, promote economic development and prosperity of the region's countries, and contribute to global energy security. 

The Minister stressed Azerbaijan's commitment to resolving the issues concerning all areas of cooperation, including legal status of the Caspian Sea, in the spirit of respect for the sovereign rights of the littoral states, through mutually beneficial partnership and amicable negotiations. However, Elmar Mammadyarov noted the aspects on which Baku has its own views. In the context of security he said, "We proceed from understanding that military presence of the parties and military activity in the Caspian Sea must be based on the principle of equal opportunities for security of all littoral states". By mentioning this, he diplomatically, but also sufficiently clearly pointed out to the fact that in reality, there is no equal opportunity for security in the sea as Russia, which already has dominant navy in the Caspian Sea, continues to build up its military presence. This is partially true in case of Iran as well.  

Head of Azerbaijan's foreign ministry noted "…importance of freedom of transit for intra-continental Caspian states from the Caspian to other seas and world ocean. We hope that all issues related to commercial shipping, right of way for the ships from the region through zones under national sovereignty of other parties, building pipelines and cables on the bottom of the Caspian Sea, carrying out marine research will be addressed as part of the negotiations process in line with international sea law". Caspian littoral states have differences on this matter as well. Russia limits passage of ships from the Caspian Sea to Black Sea through its internal rivers, but also rigidly objects to building pipeline infrastructure across the Caspian which could be used to transport oil and gas from Kazakhstan and Turkmenistan to Azerbaijan and further to European markets. 

Elmar Mammadyariv's next message was directed to Turkmenistan and Iran which propose "original" and inacceptable methods of division of the seabed to justify their claims for expansion of their sectors in the Caspian Sea on account of Azerbaijan's share. He said, "we attach importance of agreements signed by Republic of Azerbaijan, Republic of Kazakhstan and Russian Federation on delineation of the Caspian seabed which are inalienable part of the legal status of the Caspian sea, and basis for achieving common agreement. There is no doubt that shared interest of the region's countries in improving investment climate, developing energy resources, creating realiable and safe utility communications, as well as ensuring security and stability in the Caspian basin require from us additional efforts for achieving agreements on all pending issues. We are convinced that setting up baselines in accordance with international practice would facilitate achievement of common agreements".

As we can see, in spite of progress in negotiations, differences among littoral states are still significant, and they are not willing with give up their positions. "Iran's position regarding the Caspian Sea status remain unchanged, and we this there is no need to change it", said Iranian foreign minister Mohammad Javad Zarif. He re-confirmed that Iran considered inadmissible for non-riparian countries to have military presence in the Caspian basin. "Unfortunately, some non-regional players regard Caspian only as oil and gas source, ignoring environmental matters. Iran proceeds from the position that to address problems of the Caspian Sea we need to take steps which would assure comprehensive long-term collective interests." 

Iranian foreign minister speaks about harmonization of interests whereas Iran's differing position has become the key impediment is achieving mutually acceptable agreement on the status of the Caspian Sea in the protracted negotiations. It is related to the fact that main Iranian oil and gas deposits are located in the Persian Gulf, and Iranian sector of the Caspian Sea is deep-water and does not possess significant hydrocarbon resources according to geologists. Iran is not in position to develop these deposits independently, and because of international sanctions due to its nuclear program, it cannot attract western technology and capital. Therefore, Teheran is using various pretexts (legal uncertainty, environment, etc) to protract negotiations, limit access of western companies to the Caspian Sea, not to mention advancement of military infrastructure of non-riparian countries to the Caspian basin.   

A key issue on which parties lack consensus is division of the seabed to national sectors. Azerbaijan, Kazakhstan and Russia insist on delineation based on "median line" in accordance with Article 6 of the 1958 Geneva Convention on continental shelf, which uses a median method (axial line which is equidistant from the shores) with perpendicular lines on the junctures of state borders. This method was used in respect to the Dead Sea, Baltics with Botkin Gulf, American Great Lakes, etc. A similar delineation in the Caspian would assign to countries segments corresponding to the length of their coastline where Azerbaijan has 955 km, Kazakhstan has 2320 km, Iran has 724 km, Russia has 695 km, and Turkmenistan has 1200 km. Moscow, Baku and Astana have been able to reach agreement on this issue, having solidified it both through bilateral agreements, and tripartite treaty which identified a point where national sectors in the north of the Caspian sea juncture. 

However, Iran is opposing to delineation of the sea bed along median line which, in this case, will get about 14 to 16 percent of the shelf. Teheran demands to divide the seas in five equal pieces, literally like a cake: to identify a mid-point in the water area, and chart radial lines to the border points onshore. By promoting this option, Iran wishes to get an access to oil and gas rich central areas of the sea, and simultaneously, acquire a legal right to object to the construction of Trans-Caspian Pipelines which may be used for transportation of Turkmen gas westwise via Azerbaijan. 

While Moscow has expressed solidarity with Baku and Astana on dividing the Caspian shelf based on the "modified median line" method, it is siding with Iran on Trans-Caspian pipeline issue. Legal and environmental arguments which they are putting forward to justify their objections are beneath any criticism. The truth is that Russia has built gas pipelines beneath Black and Baltic Seas, and tens of thousands of kilometers of pipelines lie in the bottom of the Caspian Sea connecting offshore oil and gas fields during many decades of production. Thanks God, we do not have any record of major failure leading to environmental disaster. 

One of the impediments to implementing Trans-Caspian gas pipeline is the pending dispute between Azerbaijan and Turkmenistan concerning frontier oilfield of Kapaz (Sardar). Azerbaijan's proposal on joint development of this field is not only fair but also beneficial to Turkmenistan itself. No one would mind to transport produce from this field through existing Azerbaijani pipeline infrastructure for Azeri-Chirag-Guneshli oilfield located nearby. Joint development of Kapaz (Sardar) would provide access of oil and gas produced here to western markets, and meanwhile would significantly reduce amount of required capital investment and future maintenance costs. 

Lately, dialogue between Baku and Ashkhabad has visibly intensified. Last month, Turkmen foreign minister visited Baku, and SOCAR president Rovnag Abdullayev traveled to Ashkhabad in April, where he was received President of Turkmenistan Gurbanguly Berdymuhamedov. Azerbaijan President Ilham Aliyev has received invitation to pay a visit to Ashkhabad. Currently details of the visit are being agreed through diplomatic channels. Cooperation between Azerbaijan and Turkmenistan in developing energy resources of the Caspian Sea promises to be mutually beneficial. Recognition of this fact should be able to make parties to achieve a compromise on disputes and promote necessary and profitable projects. 

Baku is continuing a dialogue with Iran as well. During the Moscow conference Azerbaijan foreign minister Elmar Mammadyarov held a bilateral meeting with his Iranian counterpart Muhammad Javad Zarif. The latter, having recalled President Ilham Aliyev's recent visit to Iran, said that parties had discussed a range issues during the visit, including those pertaining to the legal status of the Caspian Sea. Discussions were rather fruitful, according to Iranian foreign office chief, and he said he hoped that effective cooperation between the countries would develop further. 

Against the backdrop of increasing tension along the Russian borders, Russia's declared intention to resolve disputes on the Caspian only through peaceful dialogue and collaboration is a welcome development. However, it cannot be considered coincidental that just one day after closure of foreign ministers conference in Moscow, Russia conducted a surprise inspection of combat readiness of its Caspian flotilla with seven day long tactical exercises. The exercise includes flagship vessel of the flotilla, guided-missile ship Tatarstan, around ten minesweepers and support vessels, onshore missile batteries, and over 400 seamen. They will carry out not only maneuvers, but also instruction practice. In this respect, building capacity of Azerbaijan's navy and strengthened control over the national sector of the Caspian Sea, complemented by diplomatic efforts, seem logical.